Mixed Stock Performance Ahead of FOMC Meeting Results

The S&P 500 Index ($SPX) (SPY) is up +0.06%. The Dow Jones Industrials Index ($DOWI) (DIA) has increased by +0.30%, while the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.23%. June E-mini S&P futures (ESM25) rose by +0.04%, and June E-mini Nasdaq futures (NQM25) fell by -0.18%.

Market Overview

Stock indexes are mixed today, with eyes on the conclusion of the 2-day FOMC meeting later this afternoon. Analysts anticipate the FOMC will maintain its federal funds target range at 4.25%-4.50%. Recent economic indicators have surpassed expectations, and rising inflation risks tied to tariffs have dampened predictions for a rate cut this week. Swap markets now reflect expectations for three 25 basis point rate cuts by year-end, a decrease from four predicted last week.

US-China Trade Talks

Stocks received support from a reduction in US-China trade tensions. Representatives from both nations are scheduled to meet for their first trade discussions since President Trump imposed tariffs. US Treasury Secretary Bessent and Trade Representative Greer will travel to Switzerland this weekend for talks with Chinese Vice Premier He Lifeng, aimed at de-escalating the tariff standoff, which Bessent equated to a trade embargo.

Corporate Earnings Pressures

Several disappointing corporate earnings reports have negatively impacted stocks. Sarepta Therapeutics has plummeted over -18% after lowering its full-year net product revenue forecast. Similarly, Marvell Technology is down more than -11% after refining its guidance for the first quarter of 2026. Super Micro Computer has also seen a decline of more than -4% after reporting Q3 net sales below expectations and reducing its full-year forecast.

Mortgage Applications Rise

The US MBA reported an +11.0% increase in mortgage applications for the week ending May 2. The purchase mortgage sub-index increased by +11.1%, while the refinancing sub-index also rose by +11.1%. The average 30-year fixed mortgage rate has fallen by -5 basis points to 6.84%, down from 6.89% the previous week.

PBOC Easing Measures

Today’s efforts by the People’s Bank of China (PBOC) to enhance market liquidity include cutting the seven-day reverse repurchase rate by -10 basis points to 1.4% and reducing the reserve requirement ratio for major banks by -50 basis points to 9.0%.

Upcoming Economic Focus

This week, attention will remain on tariffs and potential changes in US trade policy. Following the FOMC meeting, Fed Chair Powell’s comments will be analyzed for insights on future monetary policy. Additionally, Thursday will bring weekly unemployment claims and Q1 reports on nonfarm productivity (expected at 0.7%) and unit labor costs (anticipated at +5.2%).

Earnings Season Insights

As the Q1 earnings season unfolds, Bloomberg Intelligence indicates a year-over-year earnings growth consensus of +6.7% for S&P 500 companies, revised down from +11.1% in November. Out of the 365 S&P companies that have reported, 78% have surpassed earnings estimates. Forecasts for 2025 earnings show a rise of +9.4%, down from 12.5% initially expected in January.

International Market Conditions

Overseas stock markets today are mixed. The Euro Stoxx 50 has decreased by -0.46%. China’s Shanghai Composite is up +0.80%, marking a 1-month high. Meanwhile, Japan’s Nikkei Stock 225 has declined by -0.14%.

Interest Rates Update

June 10-year T-notes (ZNM25) are up +3 ticks, while the 10-year T-note yield has decreased by -1.2 basis points to 4.283%. There is some support for T-note prices from strength in European government bonds, though reduced safe-haven demand, fueled by positive stock market movements, is weighing on T-note prices.

European Bond Yields

European government bond yields have moved lower today. The 10-year German bund yield is down -5.9 basis points to 2.481%, and the 10-year UK gilt yield is down -5.7 basis points to 4.457%.

March retail sales in the Eurozone fell by -0.1% month-over-month, matching expectations and marking the first decline in five months. Conversely, German factory orders for March rose by +3.6% month-over-month, surpassing predictions of +1.3%. Swaps indicate a 96% probability of a -25 basis point rate cut by the ECB during the upcoming June 5 meeting.

US Stock Movers

Charles River Laboratories (CRL) is leading gainers in the S&P 500, up over +16% after announcing a strategic review aimed at enhancing long-term shareholder value and entering a cooperation agreement with Elliot Investment Management.

Oscar Health (OSCR) is up more than +24%, having reported Q1 revenue of $3.05 billion—exceeding the consensus of $2.86 billion.

Rockwell Automation (ROK) is advancing by more than +10% after reporting Q2 adjusted EPS of $2.45, outperforming the consensus of $2.08, and raising its full-year adjusted EPS forecast to $9.20-$10.20, above the consensus of $9.18.

Walt Disney (DIS) has rallied over +10% following its Q2 adjusted EPS report of $1.45, surpassing the consensus estimate of $1.20, and forecasting 2025 adjusted EPS of $5.75, exceeding the consensus forecast of $5.44.

Other notable gainers include Gen Digital (GEN), up over +8% after reporting Q1 revenue above expectations, and CDW Corp (CDW), which saw a rise of more than +4% after reporting Q1 net sales that exceeded the consensus by a substantial margin.

On the downside, Marvell Technology (MRVL) is down over -11%, leading the declines in the Nasdaq 100 after narrowing its first-quarter 2026 guidance range. Sarepta Therapeutics (SRPT) is also suffering, down more than -15% after cutting its full-year product revenue forecast.

Entegris Inc (ENTG) has dropped more than -13% following a Q2 sales forecast well below consensus, while Super Micro Computer (SMCI) is down over -4% after reporting Q3 net sales below estimates and revising its full-year forecast downwards.

Upcoming Earnings Reports

On May 7, 2025, notable earnings reports will come from: APA Corp (APA), Atmos Energy Corp (ATO), Axon Enterprise Inc (AXON), Bio-Techne Corp (TECH), Bunge Global SA (BG), CDW Corp (DE), Cencora Inc (COR), CF Industries Holdings Inc (CF), Charles River Laboratories International (CRL), Corteva Inc (CTVA), Dayforce Inc (DAY), Emerson Electric Co (EMR), Fortinet Inc (FTNT), Johnson Controls International (JCI), MarketAxess Holdings Inc (MKTX), NiSource Inc (NI), Occidental Petroleum Corp (OXY), Paycom Software Inc (PAYC), Rockwell Automation Inc (ROK), Skyworks Solutions Inc (SWKS), Texas Pacific Land Corp (TPL), Trimble Inc (TRMB), Uber Technologies Inc (UBER), Verisk Analytics Inc (VRSK), Vistra Corp (VST), and Walt Disney Co (DIS).

On the date of publication, Rich Asplund did not hold positions in any of the mentioned securities. All information and data in this article are for informational purposes only. For more details, please review the
Barchart Disclosure Policy.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Nasdaq, Inc.